Wednesday, 26 August 2015

Proximity Housing Grant: $20,000 grant to help families live closer together

By Janice Heng, The Straits Times, 25 Aug 2015

All Singaporean families buying a Housing Board resale flat near or with their parents or married children will receive a new $20,000 grant, regardless of their income levels and whether they have received housing subsidies before.Eligible singles now get $10,000 if they buy a resale flat with their parents.Details of the Proximity Housing Grant (PHG) and other housing policy changes were released by the Ministry of National Development and HDB yesterday, after Prime Minister Lee Hsien Loong announced the moves on Sunday.Kicking in yesterday, the new grant is the latest move to help families live closer together.Under the PHG, resale buyers receiving a subsidy for the first time get $10,000 more than under the previous Higher-Tier CPF Housing Grant. Singles get $5,000 more than before. The Higher-Tier grant will be discontinued.

The PHG is open to previously ineligible buyers, including owners of private property, though they must sell it within six months of buying the resale flat. Buyers can get the PHG only once. Grant recipients and their parents or married children must live near or with each other for at least five years afterwards.

Property experts believe the grant could boost transaction volumes in the sluggish resale market. But R'ST Research director Ong Kah Seng added: "It is unlikely to have a major impact on resale prices as (loan curbs) can effectively curb lifting of prices by sellers."

At Sunday's National Day Rally, Mr Lee also announced the higher income ceiling of $12,000 for HDB flats and $14,000 for executive condominiums (EC).

"The raising of the income ceiling is welcome news to us," said operations manager Ken Lee, 30, who is applying for a Build-to-Order (BTO) flat with his accountant girlfriend, 27. Their combined pay is $1,000 above the old $10,000 ceiling.

The new income ceilings, effective from yesterday, are not just for new homes, but also for the CPF Housing Grant for resale flats and the tiered CPF Housing Grant for ECs.This will likely boost resale transaction volumes but prices are unlikely to spike, said ERA Realty key executive officer Eugene Lim.

The income ceiling for singles buying new two-room flats has been raised accordingly from $5,000 to $6,000.From the BTO launch next month, the maximum Special CPF Housing Grant will be $40,000, up from $20,000. Together with the existing Additional Housing Grant of up to $40,000, low-income first-time BTO buyers could get up to $80,000 in grants.

For two-room flats where the grant amount exceeds 95 per cent of the BTO price, buyers pay 5 per cent in cash or CPF savings. For instance, they pay only $3,750 for a $75,000 flat.

Any excess grant amount can be used to pay for optional items such as flooring, or go into buyers' CPF.Additional reporting by Yeo Sam Jo

More flat buyers? Supply can be tweakedKhaw: Govt's control means higher income ceiling will not result in more competition
By Yeo Sam Jo, The Straits Times, 25 Aug 2015Applicants for new Housing Board flats and executive condominiums (ECs) need not worry about greater competition now that the income ceiling has been raised, as supply can be tweaked accordingly, National Development Minister Khaw Boon Wan said yesterday."We have leverage over the supply and we can always adjust the supply - expand and reduce as necessary," he told reporters at the HDB Hub in Toa Payoh.Mr Khaw was responding to concerns about whether the higher income limit would create more competition, as more buyers qualify to apply for Build-to-Order (BTO) flats and ECs. From yesterday, the income ceiling for Singaporean households to buy new flats and ECs was raised by $2,000, to $12,000 and $14,000 respectively.Mr Khaw said this change had not been possible three years ago as the authorities were still addressing a demand backlog for BTO flats."Now that we've cleared the queue largely, I think it's (a good time)," he said.Asked if EC developers might raise prices as more buyers qualify under the new income ceiling, Mr Khaw again pointed to the Government's supply control.

"It's like a tap," he said. "If I were an EC developer... I would think three times. Many of them I know are thinking about adjusting (the prices) downwards to meet the increased supply of ECs versus the demand that has now largely been satisfied."

The Ministry of National Development (MND) and HDB said 21,000 families benefited from the last income ceiling rise in 2011.

Minister for National Devlopment Khaw Boon Wan dismisses suggestions that the policies to help more people better afford a home are being rolled out now in view of the upcoming General Election.He was speaking to the media this morning as the HDB unveiled details on measures announced by Prime Minister Lee Hsien Loong at his National Day Rally last night. http://bit.ly/1Jf9iyl #ndr
Posted by 938LIVE on Sunday, August 23, 2015

Mr Khaw also dismissed notions that the latest housing policy changes were timed just ahead of the coming general election (GE)."If you have been watching what we've been doing since I entered MND more than four years ago, we've been making adjustments, practically every year, because my objectives are quite clear: That home ownership is a very important part of the governance of Singapore.

"But as society evolves, salaries adjust, you need to adjust the policies as we go along," Mr Khaw said, adding that the focus shifts across different groups each time."So that is how I approach the problems. And has it got to do with GE? I could not care less when the GE is. But problems need to be resolved."

He also stressed that housing policies are "never at the expense of the lower-income group".

"Even as we extend upwards to the higher-income group, we are also improving or enhancing the subsidy for the low-income group. What it means is that, in totality, more Singaporeans get to benefit from housing subsidies. "

Mr Khaw added that an upcoming scheme to help rental families buy their own flats again will require "a lot of thinking through".

The Fresh Start Housing Scheme, announced during Sunday's National Day Rally, will target families with young children who used to own a flat, but sold it and now live in public rental units.

They will be offered two-room flats with shorter leases and stricter resale conditions.

The public and social work agencies will be consulted on the details of the scheme.

Mr Khaw said: "We are not ready for implementation yet, but it's something that I'm confident we'll be able to sort out for implementation over the next few months, which means probably next year."

New scheme offers fresh start to families living in rental flats
By Kok Xing Hui, The Straits Times, 25 Aug 2015A new scheme for families living in rental units after being forced to sell their flats can help them move out of poverty, social workers have told The Straits Times.Prime Minister Lee Hsien Loong announced the Fresh Start Housing Scheme at Sunday's National Day Rally to help second-timer rental households own a two-room flat.He also suggested a Fresh Start Housing Grant to help such families purchase their flats, as well as providing counselling for issues such as jobs, relationships, education and drugs.

However, the grant would be "not without conditions".

Experts believe that home ownership will encourage families to develop more stable employment and relationships, as well as keep their children away from unsavoury influences which rental-flat environments can bring.

While the details are still being worked out, Mr Lee said the two-room flats will come with shorter leases and stricter resale conditions to make them more affordable.

Ms Petrine Lim, principal social worker at Fei Yue Family Service Centre, believes that flat ownership will take housing woes out of the equation and allow families to focus on fixing other problems.

She said: "It's only right that (the flats) have stricter resale rules so the families cannot revert to the same cycle of selling the flat and moving back into rental units. It's only fair so the problem is less likely to recur."

Mrs Shelen Ang, head of research and development at charity Focus on the Family Singapore, said: "It is encouragement that they won't be stuck in this cycle of poverty."

Ms Denise Phua, an MP for Moulmein-Kallang GRC, who chairs the Government Parliamentary Committee for Social and Family Development, said that many of the families being targeted for assistance could have sold their first flats because of financial hardship or divorce.

While the Housing Board and the Ministry of National Development said yesterday that the scheme will target families with young children, some urged the authorities to consider helping divorcees as well.

Awwa Family Service Centre director Edwin Yim said divorcees with children often end up living with extended family members, lacking the autonomy to build their own family culture or discipline their children.

"The children would learn from other children and the extended family members would also give instructions to the children," he said.

Social workers backed the safety nets associated with the scheme and grant, such as stricter resale conditions and how the grant, if introduced, would include counselling, among other conditions yet to be specified.

"It is not just about owning a flat again. It is the whole scheme of things to help these families deal with any recurring issues," said Mrs Ang.

Mr Donald Han, managing director of property consultancy Chestertons Singapore, suggested a shorter lease of about 30 years compared with the usual 99 years on a HDB flat.

"These parents would likely be in their 40s, so in 30 years, they would be in their 70s and would have their children to support them, or they could have upgraded (their flats) by then," he said.

National Development Minister Khaw Boon Wan said yesterday that he is confident details for the scheme can be sorted out over the next few months so implementation can begin next year.Additional reporting by Yeo Sam Jo

Divorcee longs for a place to call her own
By Kok Xing Hui, The Straits Times, 25 Aug 2015

Madam Nor, a divorcee pushed into rental housing, cheered on Sunday night when Prime Minister Lee Hsien Loong announced that he wanted to help previous home owners own a property again.The 36-year-old part-time admin assistant, who asked to be identified by only her first name, sold her three-room flat in 2010 when the family could not make loan payments. Since then, her housing situation has been thrown into disarray.At her lowest point, Madam Nor and her four children - now aged nine, 10, 11 and 12 - bunked in with her sister's family, and the 13 of them squeezed into a two-room rental flat for a year.

She was later put on the interim housing scheme, run by the Housing Board, in 2012, paying $210 a month to use one bedroom.

Things eased last December when she was granted a two- room rental unit in Ang Mo Kio for $230 a month.

Still, Madam Nor longs for a place to call her own.

"$230 for a rental flat; I might as well top up a few hundred and own my own property," she said.

The rent, coupled with utility and service and conservancy charges, sets Madam Nor back almost $600 a month when she earns just $1,000.

She could not get subsidies for another flat despite having $80,000 in her Central Provident Fund because she had already taken two HDB concessionary loans with her former husband.

At the National Day Rally on Sunday, Mr Lee announced the Fresh Start Housing Scheme, which Madam Nor hopes to benefit from. The scheme targets those in rental flat households with young children who used to own flats and want to buy a flat again. There could also be a grant to help pay for the two-room flats if families show they are putting their lives in order, Mr Lee said.

Madam Nor said having a home outside of rental units will allow her to go for upgrading courses in peace. Currently, she worries about the company her children keep when she is away, as the rental block's neighbourhood is rife with fighting, drinking and loiterers. "I'm at work but wondering where they are, calling to make sure they are at home and safe," she said.

"I really hope I can have my own property. At least, whatever happens to me, my kids have my property to fall back on. In Singapore, who doesn't want their own property?"

Fillip for ECs could hurt mass market condos' demand
By Rennie Whang, The Straits Times, 25 Aug 2015The changes to the eligibility income ceiling announced on Sunday could ignite demand for executive condominiums (EC) and intensify the competition for mass market private homes.Developers of mass market apartments and ECs are targeting the same group of buyers, so experts expect the battle for sales to be stepped up.

"The same group of eligible buyers have the option to purchase ECs, and buyers today are already taking more time to decide compared with a year ago," said Cushman & Wakefield research director Christine Li.

"Mass market condos on the market could find it even harder to attract buyers."

Property agencies spent yesterday fielding enquiries from potential EC buyers, some of whom had been ineligible under the old income ceiling rules, said PropNex team director William Lim.

Mr Mohd Ismail, PropNex chief executive, said that many people at recent EC launches - including The Brownstone, The Vales and Sol Acres - had booked units even though they were ineligible at the time and had lodged appeals with the HDB.

"With (Sunday's) announcement, all these people will benefit."

The income ceiling for new HDB flats and ECs has been raised by $2,000 each to $12,000 and $14,000 respectively, Prime Minister Lee Hsien Loong said at the National Day Rally on Sunday. The changes kicked in yesterday.

MCL Land's Sol Acres, which launched last Saturday, has sold 249 units. "There should be more sales in general from the enlarged pool of eligible buyers," said the company's chief executive Koh Teck Chuan.

Qingjian Realty head of sales and marketing Donald Ng said while more people who had been ineligible have been visiting the company's developments' showflats recently, "everyone will have to work hard to see how we can translate those leads into sales".

"For new families and owner-occupiers, an EC is the logical choice between the two asset types, given the savings - a difference of about $300 per sq ft, which could be more than $250,000 - and that you are getting the same location, more or less the same product," he said.

"The only difference is that there are fewer restrictions in the private property market and more variety."

More expensive mass market homes, and those not near MRT stations, are expected to suffer more. A new or well-maintained completed private home priced below $1,000 per sq ft might not be as affected - the price differential is too narrow and buyers may prefer to forfeit their privilege to buy an EC, said Savills Singapore research head Alan Cheong.

"But if the pricing is in the $1,000 to $1,200 psf range, the relative gap to ECs in the $800 psf level is relatively large and may influence some to look at ECs instead."

Overall, prices for both segments may not move much. While private developers will price sensibly to get sales, there is a limit to how much they can cut given higher land costs, said ERA Realty key executive officer Eugene Lim.

Experts also noted that the bulk of EC buyers do not usually earn more than $10,000 a month and often rely on parents' savings for their purchases, so a higher income ceiling may not substantially change the buyer profile. Those earning more than $10,000 have many options and may have other aspirations, they said.